The Great Depression and the New Deal 1933-1939 - PowerPoint PPT Presentation

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The Great Depression and the New Deal 1933-1939


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Title: The Great Depression and the New Deal 1933-1939

The Great Depression and the New Deal1933-1939
FDR  Politician in a Wheelchair
  • Franklin D. Roosevelt's wife, Eleanor Roosevelt,
    was to become the most active First Lady in
    history.  She powerfully influenced the policies
    of the national government, battling for the
    impoverished and oppressed.
  • Roosevelt's commanding presence and golden
    speaking voice made him the premier American
    orator of his generation.

Presidential Hopefuls of 1932
  • In the Democratic campaign of 1932, Roosevelt
    attacked the Republican Old Deal and concentrated
    on preaching a New Deal for the "forgotten man." 
    He promised to balance the nation's budget and
    decrease the heavy Hooverian deficits.
  • Although the campaign for the Republicans was
    dire, Herbert Hoover reaffirmed his faith in
    American free enterprise and individualism.  He
    predicted prosperity if the Hawley-Smoot Tariff
    was repealed.

Hoover's Humiliation in 1932
  • Franklin Roosevelt won the election of 1932 by a
    sweeping majority, in both the popular vote and
    the Electoral College.
  • Beginning in the election of 1932, blacks became,
    notably in the urban centers of the North, a
    vital element of the Democratic Party.

FDR and the Three R's  Relief, Recovery, Reform
  • Franklin Roosevelt was inaugurated on March 4,
  • On March 6-10, President Roosevelt declared a
    national banking holiday as a prelude to opening
    the banks on a sounder basis.  The Hundred Days
    Congress/Emergency Congress (March 9-June 16,
    1933) passed a series laws in order to cope with
    the national emergency (The Great Depression).
  • Roosevelt's New Deal programs aimed at 3 R's 
    relief, recovery, reform.  Short-range goals were
    relief and immediate recovery, and long-range
    goals were permanent recovery and reform of
    current abuses.
  • Congress gave President Roosevelt extraordinary
    blank-check powers  some of the laws it passed
    expressly delegated legislative authority to the
  • The New Dealers embraced such progressive ideas
    as unemployment insurance, old-age insurance,
    minimum-wage regulations, conservation and
    development of natural resources, and
    restrictions on child labor.

Roosevelt Tackles Money and Banking
  • The impending banking crisis caused Congress to
    pass the Emergency Banking Relief Act of 1933. 
    It gave the president power to regulate banking
    transactions and foreign exchange and to reopen
    solvent banks.  President Roosevelt began to give
    "fireside chats" over the radio in order to
    restore public confidence of banks.
  • Congress then passed the Glass-Steagall Banking
    Reform Act, creating the Federal Deposit
    Insurance Corporation (FDIC).  A reform program,
    the FDIC insured individual bank deposits up to
    5,000, ending the epidemic of bank failures.
  • In order to protect the shrinking gold reserve,
    President Roosevelt ordered all private holdings
    of gold to be given to the Treasury in exchange
    for paper currency and then the nation to be
    taken off the gold standard-Congress passed laws
    providing for these measures.
  • The goal of Roosevelt's "managed currency" was
    inflation, which he believed would relieve
    debtors' burdens and stimulate new production. 
    Inflation was achieved through gold buying the
    Treasury purchased gold at increasing prices,
    increasing the dollar price of gold.  This policy
    increased the amount of dollars in circulation.

Creating Jobs for the Jobless
  • President Roosevelt had no qualms about using
    federal money to assist the unemployed in order
    to jumpstart the economy.  Congress created the
    Civilian Conservation Corps (CCC), which provided
    employment for about 3 million men in government
    camps.  Their work included reforestation, fire
    fighting, flood control, and swamp drainage.
  • Congress's first major effort to deal with the
    massive unemployment was to pass the Federal
    Emergency Relief Act.  The resulting Federal
    Emergency Relief Administration (FERA) was headed
    by Harry L. Hopkins.  Hopkins's agency granted
    about 3 billion to the states for direct relief
    payments or for wages on work projects.  Created
    in 1933, the Civil Works Administration (CWA), a
    branch of the FERA, was designed to provide
    temporary jobs during the winter emergency. 
    Thousands of unemployed were employed at leaf
    raking and other manual-labor jobs.
  • Relief was given to the farmers with the
    Agricultural Adjustment Act (AAA), making
    available millions of dollars to help farmers
    meet their mortgages.
  • The Home Owners' Loan Corporation (HOLC) assisted
    many households that had trouble paying their

A Day for Every Demagogue
  • As unemployment and suffering continued, radical
    opponents to Roosevelt's New Deal began to
    arise.  Father Charles Coughlin's anti-New Deal
    radio broadcasts eventually became so
    anti-Semitic and fascistic that he was forced off
    the air.  Senator Huey P. Long publicized his
    "Share Our Wealth" program in which every family
    in the United States would receive 5,000.  His
    fascist plans ended when he was assassinated in
    1935.  Dr. Francis E. Townsend attracted millions
    of senior citizens with his plan that each
    citizen over the age of 60 would receive 200 a
  • Congress passed the Works Progress Administration
    (WPA) in 1935, with the objective of employment
    on useful projects (i.e. the construction of
    buildings, roads, etc.).  Taxpayers criticized
    the agency for paying people to due "useless"
    jobs such as painting murals.

A Helping Hand for Industry and Labor
  • The National Recovery Administration (NRA) was
    designed to assist industry, labor, and the
    unemployed.  Individual industries, through "fair
    competition" codes, were forced to lower their
    work hours so that more people could be hired a
    minimum wage was also established.  Workers were
    formally guaranteed the right to organize and
    bargain collectively through representatives of
    their choosing, not through the company's
  • Although initially supported by the public,
    collapse of the NRA came in 1935 with the Supreme
    Court's Schechter decision in which it was ruled
    that Congress could not "delegate legislative
    powers" to the president and that congressional
    control of interstate commerce could apply to
    local fowl business.
  • The Public Works Administration (PWA) was
    intended for both industrial recovery and for
    unemployment relief.  Headed by Harold L. Ickes,
    the agency spent over 4 billion on thousands of
    projects, including public buildings and
  • In order to raise federal revenue and provide a
    level of employment, Congress repealed
    prohibition with the 21st Amendment in late 1933.

Paying Farmers Not to Farm
  • Congress created the Agricultural Adjustment
    Administration (AAA).  It established "parity
    prices" for basic commodities.  "Parity" was the
    price set for a product that gave it the same
    real value, in purchasing power, that it had from
    1909-1914.  The agency also paid farmers to
    reduce their crop acreage, eliminating surpluses,
    while at the same time increasing unemployment.
  • The Supreme Court struck down the AAA in 1936,
    declaring its regulatory taxation provisions
  • The New Deal Congress passed the Soil
    Conservation and Domestic Allotment Act of 1936. 
    The reduction of crop acreage was now achieved by
    paying farmers to plant soil-conserving crops.
  • The Second Agricultural Adjustment Act of 1938
    continued conservation payments if farmers
    obeyed acreage restrictions on specific
    commodities, they would be eligible for parity

Dust Bowls and Black Blizzards
  • Late in 1933, a prolonged drought struck the
    states of the trans-Mississippi Great Plains. 
    The Dust Bowl was partially caused by the
    cultivation of countless acres, dry-farming
    techniques, and mechanization.
  • Sympathy towards the affected farmers came with
    the Frazier-Lemke Farm Bankruptcy Act, passed in
    1934.  It made possible a suspension of mortgage
    foreclosures for 5 years.  It was struck down in
    1935 by the Supreme Court.
  • In 1935, President Roosevelt set up the
    Resettlement Administration, given the task of
    moving near-farmless farmers to better lands.
  • The Indian Reorganization Act of 1934 encouraged
    Native American tribes to establish
    self-government and to preserve their native
    crafts and traditions.  77 tribes refused to
    organize under the law, while hundreds did

Battling Bankers and Big Business
  • In order to protect the public against fraud,
    Congress passed the "Truth in Securities Act"
    (Federal Securities Act), requiring promoters to
    transmit to the investor sworn information
    regarding the soundness of their stocks and
  • In 1934, Congress took further steps to protect
    the public with the Securities and Exchange
    Commission (SEC).  It was designed as a watchdog
    administrative agency.

The TVA Harnesses the Tennessee River
  • Zealous New Dealers accused the electric-power
    industry of gouging the public with excessive
  • 2.5 million of America's most poverty-stricken
    people inhabited Muscle Shoals.  If the
    government constructed a dam on the Tennessee
    River in Muscle Shoals, it could combine the
    immediate advantage of putting thousands of
    people to work with a long-term project for
    reforming the power monopoly. 
  • In 1933, the Hundred Days Congress created the
    Tennessee Valley Authority (TVA).  It was
    assigned the task of predicting how much the
    production and distribution of electricity would
    cost so that a "yardstick" could be set up to
    test the fairness of rates charged by private
  • The large project of constructing dams on the
    Tennessee River brought to the area full
    employment, the blessings of cheap electric
    power, low-cost housing, abundant cheap nitrates,
    the restoration of eroded soil, reforestation,
    improved navigation, and flood control.  The
    once-poverty-stricken area was being turned into
    one of the most flourishing regions in the United
  • The conservative reaction against the
    "socialistic" New Deal would confine the TVA's
    brand of federally guided resource management and
    comprehensive regional development to the
    Tennessee Valley.

Housing Reform and Social Security
  • To speed recovery and better homes, President
    Roosevelt set up the Federal Housing
    Administration (FHA) in 1934.
  • To strengthen the FHA, Congress created the
    United States Housing Authority (USHA) in 1937. 
    It was designed to lend money to states or
    communities for low-cost construction.
  • The more important success of New Dealers was in
    the field of unemployment insurance and old-age
    pensions.  The Social Security Act of 1935
    provided for federal-state unemployment
    insurance.  To provide security for old age,
    specified categories of retired workers were to
    receive regular payments from Washington.
  • Republicans were strongly opposed to Social
    Security.  Social Security was inspired by the
    example of some of the more highly industrialized
    nations of Europe.
  •  In an urbanized economy, the government was now
    recognizing its responsibility for the welfare of
    its citizens.

A New Deal for Unskilled Labor
  • When the Supreme Court struck down the National
    Recovery Administration (NRA), Congress,
    sympathetic towards labor unions, passed the
    National Labor Relations Act of 1935 (Wagner
    Act).  This law created a powerful National Labor
    Relations Board for administrative purposes and
    reasserted the rights of labor to engage in
    self-organization and to bargain collectively
    through representatives of its own choice.
  • The stride for unskilled workers to organize was
    lead by John L. Lewis, boss of the United Mine
    Workers.  He formed the Committee for Industrial
    Organization (CIO) in 1935.  The CIO led a series
    of strikes including the sit-down strike at the
    General Motors automobile factory in 1936.
  • Congress passed the Fair Labor Standards Act
    (Wages and Hours Bill) in 1938.  Industries
    involved in interstate commerce were to set up
    minimum-wage and maximum-hour levels.  Labor by
    children under the age of 16 was forbidden.
  • In 1938, the CIO joined with the AF of L and the
    name "Committee for Industrial Organization" was
    changed to "Congress of Industrial
    Organizations."-led by John Lewis.  By 1940, the
    CIO claimed about 4 million members.

Landon Challenges "the Champ" in 1936
  • As the election of 1936 neared, the New Dealers
    had achieved considerable progress, and millions
    of "reliefers" were grateful to their government.
  • The Republicans chose Alfred M. Landon to run
    against President Roosevelt.  The Republicans
    condemned the New Deal for its radicalism,
    experimentation, confusion, and "frightful
  • President Roosevelt was reelected as president in
    a lopsided victory.  FDR won primarily because he
    had appealed to the "forgotten man."  He had
    forged a powerful and enduring coalition of the
    South, blacks, urbanites, and the poor.

Nine Old Men on the Supreme Bench
  • Ratified in 1933, the 20th Amendment shortened
    the period from election to inauguration by 6
    weeks.  FDR took the presidential oath on January
    20, 1937, instead of the traditional March 4.
  • Roosevelt saw his reelection as a mandate to
    continue the New Deal reforms.  The
    ultraconservative justices on the Supreme Court
    proved to be a threat to the New Deal as the
    Roosevelt administration had been thwarted 7
    times in cases against the New Deal.
  • With his reelection, Roosevelt felt that the
    American people had wanted the New Deal.  If the
    American way of life was to be preserved, he
    argued, and then the Supreme Court had to get in
    line with public opinion.  President Roosevelt
    released his plan to ask Congress to pass
    legislation allowing him to appoint one new
    justice to the Supreme Court for every member
    over the age of 70 who would not retire the
    maximum number of justices would now be 15. 
    Shocking both Congress and the public, the plan
    received much negative feedback.

The Court Changes Course
  • President Roosevelt was belittled for attempting
    to break down the checks and balances system
    among the 3 branches of government.
  • Justice Owen J. Roberts, formerly regarded as a
    conservative, began to vote liberal.  In March
    1937, the Supreme Court upheld the principle of
    state minimum wage for women, reversing its stand
    on a different case a year earlier.  The Court,
    now sympathetic towards the New Deal, upheld the
    National Labor Relations Act (Wagner Act) and the
    Social Security Act.
  • A succession of deaths and resignations of
    justices enabled Roosevelt to appoint 9 justices
    to the Court.
  • FDR aroused conservatives of both parties in
    Congress so that few New Deal reforms were passed
    after 1937.  He lost much of the political
    goodwill that had helped him to win the election
    of 1936

The Twilight of the New Deal
  • In Roosevelt's first term, from 1933-1937,
    unemployment still ran high and recovery had been
    relatively slow.  In 1937, the economy took
    another downturn as new Social Security taxes
    began to cut into payrolls and as the Roosevelt
    administration cut back on spending out of the
    continuing reverence for the orthodox economic
    doctrine of the balanced budget.
  • The New Deal had run deficits for several years,
    but all of them had been somewhat small and none
    was intended.  Roosevelt embraced the
    recommendations of the British economist John
    Maynard Keynes.  The newly-accepted
    "Keynesianism" economic program was to stimulate
    the economy by planned deficit spending.
  • In 1939, Congress passed the Reorganization Act,
    giving President Roosevelt limited powers for
    administrative reforms, including the new
    Executive Office in the White House.
  • Congress passed the Hatch Act of 1939, barring
    federal administrative officials from active
    political campaigning and soliciting.  It also
    forbade the use of government funds for political
    purposes as well as the collection of campaign
    contributions from people receiving relief

New Deal or Raw Deal?
  • Foes of the New Deal charged the president of
    spending too much money on his programs,
    significantly increasing the national debt by
    1939, the national debt was at 40,440,000,000. 
    Lavish financial aid and relief were undermining
    the old virtue of initiative.
  • Private enterprise was being suppressed and
    states' rights were being ignored.  The most
    damning indictment of the New Deal was that it
    did not end the depression it merely
    administered "aspirin, sedatives, and
    Band-Aids."  Not until World War II was the
    unemployment problem solved.

FDR's Balance Sheet
  • New Deal supporters had pointed out that relief,
    not economy, had been the primary objective of
    their war on the depression.  Roosevelt believed
    that the government was morally bound to prevent
    mass hunger and starvation by "managing" the
  • FDR was a Hamiltonian in his idea of big
    government, but a Jeffersonian in his concern for
    the "forgotten man."

New Deal Acronyms
  • AAA-Agricultural Adjustment Administration
  • CCC-Civilian Conservation Corps
  • CWA-Civil Works Administration
  • FERA-Federal Emergency Relief Administration
  • FHA-Federal Housing Administration
  • FSA-Farm Security Administration
  • HOLC-Home Owners Loan Corporation
  • NRA-National Recovery Administration
  • NYA-National Youth Administration
  • PWA-Public Works Administration
  • REA-Rural Electrification Administration
  • SSA-Social Security Administration
  • TVA-Tennessee Valley Authority
  • WPA-Work Projects (Progress) Administration
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